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Basic Question 7 of 13
Which of the following best explains why there are diminishing returns in the short run?
B. In the short run, some inputs are fixed, so variable inputs have less to work with and output increases at a decreasing rate.
C. In the short run, some inputs are fixed, so variable inputs have less to work with and output increases at an increasing rate.
D. In the short run, no inputs can be varied, and thus production increases at a decreasing rate.
E. In the short run, all inputs can be varied, but production increases slowly because there is not enough time.
A. In the short run, some inputs are fixed, so no more output can be produced.
B. In the short run, some inputs are fixed, so variable inputs have less to work with and output increases at a decreasing rate.
C. In the short run, some inputs are fixed, so variable inputs have less to work with and output increases at an increasing rate.
D. In the short run, no inputs can be varied, and thus production increases at a decreasing rate.
E. In the short run, all inputs can be varied, but production increases slowly because there is not enough time.
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Learning Outcome Statements
determine and interpret break even and shutdown points of production, as well as how economies and diseconomies of scale affect costs under perfect and imperfect competition
CFA® 2025 Level I Curriculum, Volume 1, Module 1.